Posted on 10/22/2015 10:19:33 AM PDT by blam
Tyler Durden
10/22/2015
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Whenever we at the Automatic Earth explain, as we must have done at least a hundred times in our existence, that, and why, we refuse to define inflation and deflation as rising or falling prices (only), we always get a lot of comments and reactions implying that people either dont understand why, or they think its silly to use a definition that nobody else seems to use.
-More or less- recent events, though, show us once more why were right to insist on inflation being defined in terms of the interaction of money-plus-credit supply with money velocity (aka spending). Were right because the price rises/falls we see today are but a delayed, lagging, consequence of what deflation truly is, they are not deflation itself. Deflation itself has long begun, but because of confusing -if not conflicting- definitions, hardly a soul recognizes it for what it is.
Moreover, the role the money supply plays in that interaction gets smaller, fast, as debt, in the guise of overindebtedness, forces various players in the global economy, from consumers to companies to governments, to cut down on spending, and heavily. We are as we speak witnessing a momentous debt deleveraging, or debt deflation, in real time, even if prices dont yet reflect that. Consumer prices truly are but lagging indicators.
The overarching problem with all this is that if you look just at -consumer- price movements to define inflation or deflation, you will find it impossible to understand what goes on.
(snip)
(Excerpt) Read more at zerohedge.com ...
That is exactly what I have noticed.
I am more in agreement with you than not - but you misunderstand my intention in not supporting your '100%' - It isn't that I don't agree, but rather that my anecdotal and subjective evidence is skewed by a difference in buying habits (caused by rising prices):
In the last four years or so, $135 gets me 5-7 bags of groceries (subjective and dependent upon variation in my list of purchases). But in the last two years, it is getting very uncommon to get that 7th bag, which, if taken on it's face, would only defend a 1/7th rise in prices on average... 1/6th if you figure the 7th was bonus anyway... Not so bad, right?
But that doesn't tell the whole story, because what's in the bags has changed drastically. Produce has remained the same in content, but everything else has radically changed - no more fancy soups, no more frozen meals, no hot-pockets, and etc... Far less in prepared dinner kits (hamburger helper, rice pilafs) Potato chips and tortilla chips are still there, but in limited amount, and certainly not name-brand... very few bread products, very few pre-packaged cake type mixes, *no* chocolate, no crackers (except saltines, or on sale)... Meat and cheese is now bulk only, and is primarily burger and med. cheddar - No more steaks, few roasts, only whole chickens and turkeys... Only generic brand canned goods, and those, normally bought by the case during sales... And those are on the way out as my home gardening/canning process takes over... Far more in basics, far less in goodies and convenience. And to top it off, I went kosher, so no more pork and no more shellfish... And I have stepped up hunting and fishing... Well over half of my meat is now wild, and that will only increase.
Had I been buying all the way along like I do now, I could better quantify your claim - but I am simply pointing out that the changes I have made, while directly caused by rising prices, limit the veracity of my evidence.
I absolutely agree that prices are way, way up. But rather than succumb to those prices and paying more, I have gone old-skool, and will continue on that path... Ergo, while I agree with you, my evidences cannot lend support.
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